Israel suffered its heaviest casualty toll in a single battle yesterday, with at least nine soldiers killed and 25 wounded. Photograph: David Furst/AFP

Iran warned the west yesterday that attempts to broker a Lebanon peace deal at today's Rome summit are destined to fail and it predicted a backlash across the Muslim world unless Israel's military forces were immediately reined in.

Senior government officials said the exclusion from the summit of Iran, Syria and their Lebanese ally Hizbullah meant that no lasting settlement was possible.

Hamid Reza Asefi, the foreign ministry spokesman in Tehran, said: "They should have invited all the countries of the region, including Syria and Iran, if they want peace. How can you tackle these important issues without having representatives of all countries in the region?"

The Rome conference is to be attended by the US, Canada, Britain, France, Spain, Germany, Turkey, Russia, Lebanon, Saudi Arabia, Egypt and Jordan, as well as the UN and the World Bank. It is due to publish a statement setting out the broad outlines of a possible deal, including the injection of a muscular international stabilisation force which Hizbullah rejected yesterday. But the mood in Rome was soured last night when an Israeli air strike hit a UN monitoring post in south Lebanon, killing four UN peacekeepers from Austria, Canada, China and Finland. Kofi Annan, the UN secretary general, immediately demanded that Israel investigate the direct hit that he said was "apparently deliberate".

"This coordinated artillery and aerial attack on a long established and clearly marked UN post ... occurred despite personal assurances given to me by Prime Minister Ehud Olmert," Mr Annan said. Israel expressed regret, and promised an investigation, but denied it had targeted the post.

Fears that the conflict could spread across the region intensified yesterday. King Abdullah of Saudi Arabia, a normally placid US ally, warned that "if the option of peace fails as a result of Israeli arrogance, then the only option remaining will be war, and God alone knows what the region would witness in a conflict that would spare no one".

Tony Blair's official spokesman, confronting criticism that the prime minister had failed to call for an immediate ceasefire, insisted he had been working "on a daily, almost hourly basis" for more than a week on the details of a Rome deal.

Responding to yesterday's Guardian ICM poll reflecting widespread unease over the closeness of Mr Blair to George Bush, the spokesman said the findings were contradictory, wanting him to distance Britain from the US while demanding he use his influence on the US to bring about a ceasefire.

The ceasefire, a prisoner exchange and the new international force are expected to comprise the main elements of the Rome deal. The US is also thought to be ready to offer Lebanon the return of the contested Shebaa farms region occupied by Israel since 1982 as part of the package.

But Iran claims that no amount of western effort can bring a breakthrough, with key parties shut out of the negotiating room. A senior Iranian official, speaking by phone from Tehran, said: "Iran and Syria should be involved [in peace negotiations], not because they are sponsors of Hizbullah, but because they are regional powers. If Saudi Arabia, Jordan and Egypt are involved, then Iran and Syria should be as well, if they are looking to be successful."

The official added that a continuing failure to halt the fighting and reach a just settlement would "certainly spark a backlash" across the Muslim world. He said that public opinion was increasingly outraged by the destruction of Lebanon.

Last night, Hizbullah's leader, Hassan Nasrallah, said his group's missiles would start hitting targets deeper into Israel, and warned he would not accept a "humiliating" ceasefire. Another Hizbullah leader hinted that the group had not expected such a ferocious response from Israel, as previous border incidents have usually played out in low-key fashion.

The US, Britain and Israel blame mainly Iran and, to a lesser extent, Syria for the bloodshed in Lebanon, claiming they supply missiles and money to Hizbullah and say that Iran is seeking to deflect attention from UN moves to take punitive action over its nuclear programme.

But Iranian and Hizbullah officials say they suspect Israel's action against Hizbullah is part of a wider US-inspired tactic. Mr Nasrallah said the US-Israeli "assessment" had identified obstacles to their vision of a "new Middle East" and had set out to eliminate them. He said Israel had been looking for a pretext to launch an offensive; the abduction of two of its soldiers two weeks ago gave it the perfect excuse.

Iran's president, Mahmoud Ahmadinejad, said UN inaction was not helping. "Upon hearing the slightest criticism against the Zionist regime, they issue dozens of resolutions. But now, 13 days after that regime's massive attack against Lebanon, using most fatal weapons, they even refrain from asking for a truce," he said.

Britain has been criticised for aligning itself too closely with the US, and last night the Foreign Office was looking into a report that a British airport was used as a staging post last weekend by US planes transporting bunker busting bombs to Israel. "If the Americans have done something wrong, then we will raise it with them," a spokesman said of the report in the Daily Telegraph.

An official involved in preparations for the summit lowered expectations for the Rome meeting: "It's going to be a talking shop," he said.

He added: "Iran and Syria are definitely protagonists and people will need to speak to them as this goes on. But this meeting will not find the silver bullet."